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Debunking the Extended Warranty Myth:

A Car Buyer's Guide

Factors to Consider Before Purchasing an Extended Warranty

Buying a New or Used Car? Make an Informed Decision on Extended Warranty for your Vehicle.

Date: 13th April 2023

Author: James Reynolds

Man dressed in a button up blue suit with tie


Buying a new or used car can be both an exciting and overwhelming experience. As a consumer, you want to make sure you're making the right choice and getting the best deal possible. One aspect of the car-buying process that often causes confusion is the extended warranty. Many dealerships push extended warranties, claiming they're essential for your peace of mind or automatically include the cost of the extended warranty in the vehicle purchase price. 


However, the truth is that you don't always need to purchase an extended warranty from the dealer.


This article will outline some crucial factors to consider before making a decision about extended warranties.

Understanding Extended Warranties

An extended warranty is an additional protection mechanism that covers repair costs beyond the manufacturers or Statutory Dealer standard warranty. Dealerships often promote these warranties as a way to protect your investment and avoid costly repairs down the line. While this might sound like a smart choice, it's essential to evaluate the actual benefits and determine whether an extended warranty is truly necessary for your specific situation.

Factors to Consider Before Purchasing an Extended Warranty

1. Manufacturer's Warranty Coverage


Before considering an extended warranty, it's crucial to understand the coverage provided by the manufacturer's warranty. Many new cars come with comprehensive warranties that protect against most major repairs for several years. If you're buying a used car, check the remaining manufacturer's warranty, as it may still be in effect. In some cases, the existing warranty might be enough to cover your needs without the need for an extended warranty. In the event there is no manufacturer or Statutory Dealer warranty on the vehicle, that's okay, you can still purchase an extended warranty from


2. Reliability and Repair Costs


Research the reliability and average repair costs of the make and model you're considering. Some vehicles have a proven track record for dependability and low maintenance costs, making extended warranties less valuable. If the car you're interested in has a history of costly repairs, an extended warranty might be worth considering.


3. Length of Ownership

Consider how long you plan to keep the car. If you intend to sell or trade it in within a few years, an extended warranty may not be worth the expense, as the manufacturer's warranty will likely cover any significant issues that arise during that time.


4. Cost and Limits Per Claim


Extended warranties can be expensive, and the added cost might not be worth the potential benefits. Additionally, many extended warranties have limits per claim based on the vehicle's age and number of kilometres, which means you'll still be responsible for a portion of repair costs above this limit. Be sure to carefully assess the costs and terms of the warranty before making a decision.


5, Third-Party Warranty Providers


If you're still interested in an extended warranty, remember that you don't have to purchase one from the dealership. Several reputable third-party providers offer extended warranties, often at a lower cost or have more benefits than those sold by dealers. The best part is that you can purchase an extended warranty from at any time throughout your vehicle ownership cycle.


Some dealers use pressure tactics and will tell you that you cannot purchase an extended warranty once you leave the dealership. This is true only because of the type of extended warranty they sell. Our products can be offered to you at any time, so don't be fooled by their sales techniques.



When purchasing a new or used car from a dealership, it's important to remember that you don't have to buy an extended warranty from the dealer. Thoroughly assess your needs, research the vehicle's reliability, and consider alternative warranty providers to make an informed decision. By doing so, you can save money and still enjoy peace of mind when it comes to your vehicle's maintenance and repair needs.

Get a competitve range of quotes from us today.

Need Help Deciding?


Why not give us a call and discuss some extended warranty options. We're an Australian Brokerage with access to four Australian Warranty suppliers.


Call: 1300 973 066